North Coast 500: talent shortage threatens Scotland’s tourism route
David Whiteford of Highland Coast Hotels said the group goes to great lengths to take care of its employees because “good people are hard to come by”. This is especially true in remote and rural areas where the lack of affordable housing is a major barrier.
“Costs, as we all know, skyrocketed and it was very difficult to budget for any of them — food and drink costs, energy prices, staff costs — but we are determined not to cut staff,” he said.
“We’re going to be efficient with staff, but we’re a people-based industry. You can use technology to some extent, but guests want to meet people and be well received in the Highlands, which is why we are committed to hiring locals and keeping people an integral part of what we do.”
Mr. Whiteford was previously chairman of the North Highland Initiative (NHI), a charity that helped create and develop the NC500. He stepped down in 2021 after securing the backing of leisure investment specialist Kings Park Capital to launch Highland Coast with an initial portfolio of four properties: Royal Golf Hotel in Dornoch, Royal Marine Hotel in Brora, Kylesku Hotel in Sutherland , and neighboring Newton Lodge in Unapula.
The group has since acquired two more hotels, the Tongue in Sutherland and the Plockton Inn overlooking Loch Carron, bringing the total to 200 at peak times. The Highland Coast is committed to further expansion despite the difficult economic climate.
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In a submission last year to the Scottish government about the labor shortage, UKHospitality Scotland estimated that the sector’s vacancy rate was between 10% and 16%, corresponding to 48,000 unfilled jobs. As with many other industries, shortages have become particularly acute since Brexit.
These difficulties are exacerbated in remote areas, where the lack of affordable housing, leisure and health services creates a barrier to building a local labor pool. Managing director Alex Mackay of Fusion Group, which owns nearly 40 hotels and self-catering properties in western and central Scotland, said the industry has lost a lot of skills over the past three years as the combination of Brexit and the pandemic has left many that “historically operated for hire” to either return home or change industries.
“It’s very difficult in rural areas,” Mr McKie said.
“The only advantage the countryside has is when it has staff housing. Staff placement is key for at least 10 sites I own or work with.”
When asked about the impact of staff shortages, he said that some operators are “overpaying” for staff and that “poaching” has become widespread. Wage increases leave some business owners no choice but to raise prices, but there is a limit to this as consumers also face inflationary pressures.
As highlighted earlier this week in a survey by the Scottish Licensed Trade Association, Mr McKie said operators are also reducing service levels, whether it’s opening on fewer days or offering a limited menu.
Mr Whiteford of the Highland Coast said there were times in the past year when some of the group’s establishments had to shut down business due to lack of staff. A restaurant in Kilescu, for example, could not cater for fleeting trade because hotel residents had to take precedence.
“There is a cost to not having people, so having really good people on site means you are open to business,” he said.
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“The inability to be open to business is a real problem for us because we are here to be active and work well. You can’t be active if you’re half closed.”
While there will always be a need for seasonal workers, Mr. Whiteford said the Highland Coast “never” hires workers on zero-day contracts and opts for long-term employment arrangements where possible. He added that the group sees itself as a “local leader” on a range of issues affecting those who live nearby, whether it’s housing, healthcare or providing child care: “If it’s good for them, it’s good for us – it’s pretty easy , like what.”
He continued: “We’re trying to get as many locals involved as possible, but affordable housing is a big hurdle — or, sorry, the lack of it is a big hurdle.
“I am lobbying for this in Tonga, in Skouri, a village near Kailescu, and in Plockton itself. This is an obstacle for youth, couples and families to come and become colleagues in our institutions.”
There is housing for seasonal workers on the Highland Coast, but such people have become harder to find in recent years given the “significant” impact of Brexit.
“Some of our friends from Eastern Bloc countries like Poland did come back, although I would argue that some of them did come back anyway because their economy was improving and they quite rightly wanted to go home.
“But there is evidence that there are people from Czechoslovakia and other places who would like to come here (and work), so it would be very, very good to have a visa scheme for Eastern Bloc countries so that we can “resupply” . ‘ peak season, as well as an inexpensive visa scheme.
“We always like to see if we can grow more from the inside, but we always need to complement and I really think we need to move better within the opportunities that hospitality can give to young people.”